There is no better time to invest than now, as the saying goes. Starting as soon as you can ensures that you not only compound your wealth over time, but also start accumulating a dividend stream that will provide you with useful passive income. Rather than segregate investors into either growth or income, I believe you can enjoy the best of both worlds by setting up your investment portfolio with a healthy mix of each type of stock.
You should adhere to a set of criteria when choosing suitable stocks for your portfolio. Companies should have a strong brand or competitive moat ensuring they can continue to draw customers. They should also possess a long growth runway and be innovative in launching new products and services that generate customer loyalty. It also does not hurt if a company has a strong track record of growing its dividends as this means it can likely continue doing so.
So if you have $10,000 to spare, here are three stocks you might want to consider accumulating.
Apple(NASDAQ: AAPL) needs no introduction -- it's a pioneer in the smartphone industry armed with a plethora of useful gadgets and devices that many cannot do without. Its iconic iPhone, iPad, and Apple Watch have set the standard for many competitors, and the company has a large and loyal following of customers that eagerly await each new product launch.
Despite being a trillion-dollar company, Apple posted revenue growth of 7.8% year over year for its fiscal 2022, along with a 5.4% year-over-year increase in net income. For the first six months of fiscal 2023, Apple posted a rare 4.2% year-over-year revenue decline, with net income slipping by 9.2% year over year to $54.2 billion. The drop was because of supply chain woes amid the U.S.-China spat, but many investors believe that this is merely a blip for the company.
Despite the weaker numbers, there is now palpable excitement over Apple as the company launches its first major piece of hardware in nearly a decade, the Vision Pro. The new headset promises to blend the real and virtual worlds using a mix of virtual and augmented reality, and promises a new level of immersion and clarity, all with a price tag of $3,500.
Apple is also thinking of shifting around 18% of its global iPhone production to India by 2025, reducing its reliance on China and possibly enjoying better margins as costs are lower in India compared with China.
Meanwhile, investors can also enjoy quarterly dividends fof $0.24 per share, a slight year-over-year increase from the $0.23 paid out a year earlier.
Polaris(NYSE: PII) is a manufacturer of power sports vehicles, such as off-road vehicles, snowmobiles, and motorcycles. The company has remained resilient through the pandemic as its vehicles continue to find a ready market.
Sales rose from $7 billion in 2020 to $8.6 billion in 2020, with net income (excluding exceptional and one-off items) climbing from $504 million to $589.7 million over the same period. Polaris demonstrated continued growth for the first quarter of 2023, with sales rising by 22.4% year over year to $2.2 billion and net income surging by 53% year over year to $113.4 million.
It helps that Polaris is a steady dividend payer, having raised its annual payout over 27 consecutive years from just $0.15 back in 1996 to $2.60 in 2023.
The recent results saw higher sales volume across all the company's three main divisions, with gross margins also rising in tandem because of better pricing. With Polaris' leadership in the off-road and motorcycle segments, it should continue to see volume growth, and should maintain its premium pricing.
New product launches should help maintain interest in its products, and the last two months saw the launch of two lines of lifestyle and performance apparel for its Slingshot and Indian Motorcycle products.
Lululemon Athletica's(NASDAQ: LULU) portfolio of athleisure apparel caters mostly to gym enthusiasts and yoga practitioners, and the company has a loyal following of customers that are hooked on its cutting-edge designs and technology.
The company has seen its revenue and net income improve sharply over the past three years. Revenue for fiscal 2023, ended Jan. 31, clocked in at $8.1 billion, up from $4.4 billion in 2021. Net income (excluding impairments) shot up from $588.9 million to over $1.2 billion over the same period. Lululemon also generated positive free cash flow for all three fiscal years, and its recent first quarter of fiscal 2024 saw revenue jump 24% year over year to $2 billion.
There could be more growth to come for the athleisure company. Back in 2019, it unveiled its "Power of Three" five-year strategic growth plan to accelerate growth with three key pillars: product innovation, omnichannel customer experience, and market expansion. The strategy turned out to be extremely successful, with the goals all met two years ahead of time. Lululemon doubled its men's division revenue and its digital revenue proportion, while also quadrupling the revenue share from its international division.
The company has now come up with a new five-year growth plan with even more ambitious targets. It plans to once again double its revenue to $12.5 billion in five years with the same achievements in the three pillars that seeded its success over the past three years. These goals may seem lofty, but Lululemon claims that its brand gained more market share than any brand in the adult active apparel industry since 2019.
With the company's innovative products and its cult-like following, these objectives look achievable -- and if the business succeeds, investors could be seeing many more years of both top- and bottom-line growth.
10 stocks we like better than Apple
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 12, 2023